Correlation Between Visa and Koninklijke Ahold
Can any of the company-specific risk be diversified away by investing in both Visa and Koninklijke Ahold at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Visa and Koninklijke Ahold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Koninklijke Ahold Delhaize, you can compare the effects of market volatilities on Visa and Koninklijke Ahold and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Visa with a short position of Koninklijke Ahold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Koninklijke Ahold.
Diversification Opportunities for Visa and Koninklijke Ahold
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Visa and Koninklijke is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Koninklijke Ahold Delhaize in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke Ahold and Visa is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Visa Class A are associated (or correlated) with Koninklijke Ahold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koninklijke Ahold has no effect on the direction of Visa i.e., Visa and Koninklijke Ahold go up and down completely randomly.
Pair Corralation between Visa and Koninklijke Ahold
If you would invest 29,018 in Visa Class A on September 2, 2024 and sell it today you would earn a total of 2,490 from holding Visa Class A or generate 8.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Visa Class A vs. Koninklijke Ahold Delhaize
Performance |
| Timeline |
| Visa Class A |
| Koninklijke Ahold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Visa and Koninklijke Ahold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Koninklijke Ahold
The main advantage of trading using opposite Visa and Koninklijke Ahold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Koninklijke Ahold can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Koninklijke Ahold will offset losses from the drop in Koninklijke Ahold's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Koninklijke Ahold vs. Sendas Distribuidora SA | Koninklijke Ahold vs. Dingdong ADR | Koninklijke Ahold vs. Albertsons Companies | Koninklijke Ahold vs. Village Super Market |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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